Social media has significantly changed the media landscape. Consumers now have more media touchpoints that are growing exponentially. Navigating this complex landscape requires considering bought, owned, and earned media. Tools are needed to organize the different types of media and allocate budgets effectively based on objectives. Analyzing social network conversations provides insights into earned media and a feedback loop for bought and owned media. Extensive testing of new media combinations is also needed to fully evaluate opportunities in the current environment.

1. Social Media and Research Mike Hess Executive Vice-President Research, Marketing Science, and Consumer Insights Carat

2. Outline Current Climate: Economic and Media Social Networks Recent Advances Navigating the Landscape (BOE) Maintaining Neutrality in Planning: Tools/Cases

6. Avg 2+ person HH: +26 minutes TV per week; 4 hrs 43 minutes per day

11. Number of Touchpoints Used Driven by Age Using a 10 minute average as a cut off Those 18-24 are exposed to twice as many screen media 10+ mins as those 65+ (10 vs. 5); greater media diversity The Council for Research Excellence @The Nielsen Company

12. How Social Networks Have Changed the Media Landscape Evolution / Effect Findings from NeverEndingFriending Study

13. 2.5mm conversations 12,500 conversations

14. Online Landscape has Evolved BROADCASTERS MYCASTERS The Players: TV Networks, Online Distribution Hubs, Movie Studios, Your next store neighbor The Other Media: TV (sending and receiving) The Big Change: The Internet is not a competitor, or a complementary outlet for niche content; distribution is king, content does not necessarily live on a site The Players: MySpace, Facebook, Gawker, “News Site X,” Your next store neighbor The Other Media: Mobile (sending and receiving) The Big Change: Social networking as a toolkit has gone mainstream (see Obama). Consumers are building and Internet ecosystem around themselves

15. Social Networking is Growing.. (nearly ¾ of online users participate). 85% 75% 75% 75% 72% 72% 72% 70% 68% 57% 52% Source: Nielsen NetView age2+, * Home only

18. Self-Expression Discovery Interaction Personal Profile, Video, Blogs, Music, Photos Skin, Badges, Widgets, Wallpapers, Ringtones, Contests, Viral Video, New Features Profiles, Groups, ForumsChannels, Events, Jobs, Wikis Custom Communities, Video, Entertainment Content, Events, Cause Marketing IM, Bulletins, Comments, Blogs, Events, Friending Contests, Quizzes, Viral Content, Friending, Polls, Widgets, Twitter The Social Network Platform Source: Never Ending Friending April 2007 Base: SN 14-20 (n=2605)

19. Social Networking is Preferred Free-time Activity Check out social networking sites 17% 147 Million US users visited a social networking site* 17% Talk on your cell phone 14% Watch TV 10% Surf Web generally Play video game 9% 8% IM 7% Listen to MP3 player 71 Million (83%) Age 12-34 1% Listen to radio Source: ComScore Media Metrix, age2+, June 2009 Source: Never Ending Friending April 2007 Base: SN 14-20 (n=2605)

20. Constant Engagement When they’re regularly on social network sites… 15% First thing in the morning 16% Before school/work 18% Lunch 25% At school/work 31% After school/work 68% Evening 30% Late night (10pm-4am) Prime Time Extending into their offline lives 73% Never bored when using it 66% So many things to do 56% Add fun to going out 48% Having more fun in life general 47% More plugged into music scene 46% More on top of trends, what’s new 45% Makes my life more exciting 40% Discovered brands/products really like Source: Never Ending Friending April 2007 Base: SN 14-20 (n=2605) Q: When are you regularly on your favorite social networking site? Base = SN users 14-40; n=2,605 Q: How much do you agree with each of these statements? Top 2 box (Completely Agree, Agree) Top 2 box agreement (3-pt scale) Base = SN users 14-40; n=2,605

21. Social “Networking” Can Crowd Out Traditional Behavior Weekly hours spent… Q: During the past week, approximately how many hours did you spend doing the following activities? Base = SN users 14-40; n=2,605 non-users 14-34; n=431

22. What’s Hot Now in Social Networking?

24. Facebook hits 300 million users September 09, about the size of the US population

25. Their fastest growing segment are people age 35+

26. Social Networks seek ways to turn profitable

27. Facebook turns a profit in 3Q 09, earlier than expectedSource: Universal McCann, "Power to the People: Social Media Tracker Wave 4," July 30, 2009 Source: Adage, CNN (9.16.09)

29. Navigating the Complex Media Landscape Bought Owned Earned

30. bought earned owned

31. Time Spent Exponentially Increases earned bought owned Time spent with BOE media is proportional to consumer interest (or concern) video print audio search experiential outdoor in-store POS packaging websites applications services blogs fan pages WoM social chatter press organic search viral ATLANTA BOSTON CHICAGO DALLAS LOS ANGELES NEW YORK SAN FRANCISCO

33. Active presence

34. Talking to consumers

35. Hooking attention

36. Right time, place, mindset

38. Talking with consumers

39. Accessible and useful content assets

40. Enabling participation

41. Creating conversations

42. Being talked about by consumers

43. Listening to conversations

46. Creating the Right Media Mix Allocation Case Studies

47. Qualitative input Quantitative input Weight of variables Analysis Output Ingredients Include Quali-Quant Inputs

51. Print 37%

52. Trade 9%

54. Inserts/ROP 19%

55. Spot Radio9%

56. Net Radio14%

57. Cable TV 7%

58. Search 7%

59. Digital6%

60. Spot TV 9%

61. Magazine 10%Step 2: Activity modeling Media investment based on brand strategy

62. Home Improvement Store …. Lead to a Very Different Recommended Mix

63. Summary Withtouchpoints and complexity exploding, tools requiredto address Current environment especially conducive to SN growth To organize the complexity, we’ve found that Bought/Owned/Earned (BOE) is a useful nomenclature Scraping conversations beneficial way to monitor/evaluate Earned portion and provide feedback loop for Bought/ Owned Allocation needs to be based on plan objectives Many media combinations have never been run, or only rarely….new era of Testing required to fully evaluate